The Electoral Referendum Bill enables the referendum that the Government seeks to hold on the future of the MMP system. I think it is obvious already from the speeches on this side of the House that Labour regards a referendum as premature. We have had only five MMP elections. There is significant evidence that the electorate is honing its skills to use MMP to find and achieve the sorts of outcomes it wants. The so-called wasted vote—the vote that goes to those parties that do not achieve the 5 percent threshold or otherwise do not have their votes counted under the system—got down as far as 1.3 percent in 2005. The process of starting to reduce the number of political parties represented in this House was begun in earnest by the people at the last election. Looking at the trends, Colin James has predicted that by 2014 probably four parties, or five at the most, will be represented in this House if the trends continue. So people are working out how most effectively to use MMP. Our view is that they should be allowed to continue to do that for some time before we look at potentially throwing out the baby with the bathwater.

As other speakers have said, moving to MMP was a good thing. Chris Tremain has just reflected on the anomalies that were produced by the previous electoral system. He mentioned the position of Social Credit, which on one occasion received a large chunk of the votes but had only two members. Under first past the post between 1935 and 1993 the National Party scored a higher ratio of seats to votes than Labour did, and in 1978 and 1981 it won office with fewer numbers of the popular vote than the Labour Party. That system is unfair by any measure. As Metiria Turei said in her contribution, since the introduction of MMP we have seen the House become much more diverse. Pete Hodgson made that observation as well. The entry of smaller parties has ensured that the views of the electorate are better represented in this House, and that the views expressed in speeches, questions, and otherwise are less monolithic.

I am not saying that MMP is perfect or that a small number of sensible changes should not be made so as to increase its fairness and its effectiveness. Lianne Dalziel spoke about some of the potential changes. One is to eliminate the waiver under which a party that wins one electorate seat does not need to get 5 percent of the party vote for proportionality. Without the waiver, ACT would now have one seat, not five, and Winston Peters would have been a lone MP in 1999. There are other possibly desirable changes to the system around the threshold, and around the proportionality of electorate versus list seats, although personally I am less convinced on those questions.

Although we on this side of the House take the view that I have outlined, we will support sending the legislation to a select committee. But that select committee will have to consider one important question. There is another bill that will deal with the future electoral finance rules around third-party advertising. The point at which that bill and this one coincide, and where serious questions arise, is the decision to hold an electoral referendum at the same time as a general election. Interest groups will be able to run parallel campaigns, advertising in both the election campaign and the referendum campaign. If they intend to spend more than $12,000 they will have to register. But as far as the State is concerned, the proposed limitation of registration is where all issues would end. From that point on, people or groups can spend what they like.

The Minister of Justice has said that the registration rules that I have just described go further than the advertising restrictions placed on the 1992, 1993, and 1997 referenda, where there was no cap on spending and, at that point, not even a need to register with the Electoral Commission. All that was needed then was a promoter statement. As Lianne Dalziel pointed out, that was before the Exclusive Brethren showed what unlimited spending could deliver. It is important that all members of the House do not underestimate the enduring fear and disquiet that the conduct of the Exclusive Brethren and others caused when they sought to subvert our electoral laws.

In the United States there is a constitutional guarantee of freedom of expression. It is found primarily in the First Amendment to the Constitution. But even in the United States, that temple to free expression, it is recognised that there is a public interest in limiting the amounts that wealthy individuals or groups can spend to disproportionately influence the result of elections, and that the guarantees contained in the First Amendment are not absolute. It has been interesting this year to watch, in particular, the struggles that have occurred on this question. These struggles have occurred since the 1970s, when Congress and the President first started to attempt to regulate campaign finance.

The latest developments have included the Bipartisan Campaign Reform Act of 2002, commonly known as the McCain-Feingold legislation. At the point when that legislation was signed into law by the second President Bush in 2002 it was thought that, finally, a bipartisan and satisfactory compromise had been reached on the question of campaign finance. Unfortunately, that ignores the regrettable ultimate success of attempts over many years to stack the United States Supreme Court with extreme right-wing jurists from one particular philosophical direction. Earlier this year, significant parts of the McCain-Feingold legislation were struck down. That decision, Citizens United v Federal Electoral Commission, is widely reviled. It has been rejected by commentators and learned academics, but also by some 80 percent of Americans, who think it is wrong. They know that it will lead to an avalanche of soft money from wealthy corporate interests to skew the mid-term election results, which are due in November. People who want to see the United States make good progress on legislation—for example, to allow it to impose emissions limits on greenhouse gases—know that this decision, striking down the soft money provisions of the McCain-Feingold legislation, will make that prospect much, much more remote.

There is a clear analogy with the parallel campaigning loophole that appears in this bill. We in this House all know that big business in New Zealand does not like MMP and would like to see the back of it, because it does not allow for the imposition of its will, as the previous system did and many alternative systems would. Many have assumed that this dislike is what lies behind the National Party’s decision to promote this referendum, which is why so many of us have been impressed by the way that the Minister has none the less largely managed to come up with what looks like a fair process. But we should be concerned that the Minister appears, on this issue, to have been forced to sacrifice true and complete transparency for the participants in the referendum process by allowing for parallel campaigning and by failing to provide for spending caps.

I end by making it clear that the interests of democracy require us to remedy this defect as the bill proceeds. If it is not fixed, the bill will fail to retain the widespread support across the House that good electoral reform needs to attract.